Editorial Comment

Progress, Volume XV, Issue 12, 1 August 1920, Page 853

Editorial Comment

If money is the measure of industrial development, New Zealand is booming, for there has seldom been so great a call for increased capital for large businesses, and loans for public

Loans—and More Loans.

bodies. Wellington City Council is asking its ratepayers to sanction a loan of £1,700,000, and the Prime Minister declared in Parliament recently that nearly every local body in the country seemed to be going in for heavy borrowing. He is concerned about the rising rate of interest. Local bodies hitherto have not been permitted to borrow at a higher rate than 5 per cent, but under present conditions, the Stateimposed limitation has been raised to per cent., while private companies are raising capital on 6 per cent, debentures. The ease with which the latter seem to be securing their requirements shows that investors are taking a fair view of the position, and that the millions of private accumulations disclosed by the bank returns are likely to go into useful circulation at a reasonable rate, so long as the Government and local authorities do not display too much anxiety in the rush for loans. An excess of competition will have its effect upon the lender's ideas regarding interest, unless the Government strictly controls the position in accordance with the legal power in its hands.

If borrowing provides the sure sign of prosperity, we are going to be very prosperous, especially as the money will be loaned by New Zealand to New

The Curb on Spending.

Zealanders, and the interest spent in the country. Important public works of a developmental nature must he carried out almost regardless of cost, unless the country is going to stand still. Hydro-electric head-works, for instance, will ultimately prove so remunerative that they should take the first place on the public works programme. But we believe that the restricted labour supply and the high cost of materials will effectively curb the orgy of spending for which the public authorities are pre-

paring, according to the evidence of their loan schedules. The Hon. C. J. Parr, Minister of Education, has put the difficulties of the position into a nut-shell when he informed a deputation of educationists that he feared that he must call a halt on school building programmes unless he can get better value for the money, "because." he said, "the threequarters of a million allocated for the purpose is effectively worth to-day only £400,000." This is one of the causes of the comparative failure of the public effort in connection with housing.

Though all the resources of the State are behind the Housing Department, it has been so hampered by the difficulties of shortage of materials and labour that these two subjects occupy

Labour and Nationals.

the bulk of its annual report to Parliament. Some very illuminating facts appear. It is shown that when the Government displayed the greatest activity and optimism over its housing programmewhen houses were being scheduled by the hundred—no builders could be got to tender. Two hundred dwellings were wanted in one instance, and the most elastic conditions were specified. The tenderer could make his choice of materials, and submit his own designs, "yet only two small tenders were received for complete dwellings at a reasonable price." The chief obstacle to building operations has been in obtaining supplies of materials, states' the Housing report. In view 'of the fact that pracically all the dwellings now under construction are of concrete, the recent shortage of cement has greatly intensified the difficulties to be met; but the decision of the Board of Trade to allocate cement in accordance with the urerencv of requirements, -placing workers' dwellings second on the list, should have the effect of largely rem ovine: this difficulty in future. The shortage of timber also has been marked, but the Department has recently overcome this to some extent by arranging for the mrrehase of large ouantities directly from the mills. In November last the Department arranged for the importation of considerable quantities of other materials, such as roofing-iron and other hardware, and these are now almost all to hand. In this connection it may be noted in justification of the Department's action that while the current price of roofing-iron in New Zealand is £75 a ton, a shipment of 200 tons arranged for bv the Department was recently landed at a cost of £43 a ton. The Housing Superintendent has investigated the causes of shortage of labour in the building trade. His report goes straight to the heart of the trouble, showing that unless we have an influx of artisan immigrants, the difficulty is too deep-rooted for local solution:"ln order to disclose one cause of this shortage I have obtained information showing that in the various building trades there has been a great falling-off in the number of apprentices since five years ago. In the carpentering trade, for instance, the employers in the principal towns in the Dominion employed in April, 1914, 391 apprentices. To keep pace with the increase in population this number should have increased by April, 1919, to 405, yet the number employed by the same employers was only 245 much more than half. The shortage of apprentices and skilled workers not

only in the building trade but in most occupations calls for serious and urgent attention."

An offer by four of the largest building firms in Wellington to concentrate their resources for one year upon the building of small dwellings, and thus

Co-operative Building.

get rid of the shortage, has attracted a great deal of public attention. The scheme, on the face of it, is just the thing to grip the imagination, and raise high hopes, especially as it involves the mo«t complete kind of co-operation between canital and labour, the building trades unions being joint partners with the employers in the scheme. Our enthusiasm is not at fever-heat over the project, because we have the evidence of the Housing "Report to show that the biggest organisation in this country, the State, has not achieved much in a twelve-month of effort, and half a million sterling to back it. We suggested qirte

a vear ago that the State might be able to do useful things if its organisation was centred on the housing problem, but the State does not seem able to rise superior to labour shortage or restricted supplies of material, and me fear that the big co-operative building scheme will fall down for similar reasons. There is more building of houses going on to-dav than most people realise. There are the workers dwellings contracts. and innumerable private contracts. The latter are usually undertaken by small firms of working builders who have a team of men thoroughly accustomed to this special work of building dwellings. If thev can get supnlies. thev are extremely efficient in their methods. What will happen to these useful working teams of home builders if a giant co-ope-e----tive building organisation offers such high wages that the majority of the building trade employees are

attracted thereto? And what will happen to the architects during the twelve months occupied by the experiment? Already the building trade is controlled at all pointsofficial authorisation of the job, and official control over distribution of all important materials. If to this is added a concentration of labour under the control of four big builders, thus drawing away employees from the smaller working firms, we are afraid that the consequent dislocation of the whole industry will have worse permanent results than the evil the scheme is intended to remove. Our legislators are beginning to suspect that the small builder has already been too badly treated. The Prime Minister was questioned in the House about the operation of the rent restriction legislation. Dr. Newman, of Wellington East, suggesting that it had forced out of business the speculative builder, who whatever his other —actually did build houses with celerity. Mr. Massey, in reply, hinted that the Government might have to go hack a little on its restrictive legislation owing to the fact that it seemed to have frightened out private enterprise in house building, though he added that this legislation imposing an 8 per cent, limit on rent in relation to capital value does not apply to new dwellings. It is quite a novelty to find people speaking up in friendly terms for the speculative builder. It is another instance of a benefit not being appreciated until it has

i disarm** red!